Pending tax proceedings and statutory transfer clauses can shift recovery to the State, without estoppel from participation.

A return filed under the Bengal Finance (Sales Tax) Act was treated as setting in motion an integrated process of levy, assessment and collection, so the tax proceeding was pending on the appointed date for section 4(d) of the Oriental Gas Company Act, 1960. Recovery under the Public Demands Recovery Act was held to be a continuation of the same tax process, with the pending liability transferable to the State of West Bengal rather than enforceable against the petitioner. Prior participation in the assessment did not bar reliance on section 4(d), because there is no estoppel against a statute and statutory protection cannot be defeated by conduct.

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Issues: (i) Whether the sales tax assessment and recovery steps relating to the petitioner's liability were pending on the appointed date so as to attract section 4(d) of the Oriental Gas Company Act, 1960; (ii) whether the recovery of the quantified tax liability could be enforced against the State of West Bengal and not against the petitioner; (iii) whether the petitioner's participation in the assessment proceedings barred reliance on section 4(d) of the Oriental Gas Company Act, 1960.

Issue (i): Whether the sales tax assessment and recovery steps relating to the petitioner's liability were pending on the appointed date so as to attract section 4(d) of the Oriental Gas Company Act, 1960.

Analysis: The expression "proceeding" was treated according to the statutory scheme and context. A return filed under section 10(2) of the Bengal Finance (Sales Tax) Act set in motion the machinery for assessment under section 11, and the process of levy, assessment and collection was treated as one integrated proceeding. Since the relevant returns and tax payments had been made before the appointed date, the proceeding relating to the liability was regarded as pending on that date.

Conclusion: The proceeding was pending on the appointed date.

Issue (ii): Whether the recovery of the quantified tax liability could be enforced against the State of West Bengal and not against the petitioner.

Analysis: The recovery step under the Public Demands Recovery Act was held not to be independent of assessment but a continuation of the assessment process. The Court treated assessment and recovery as successive stages of the same tax liability, and held that section 4(d) transferred the enforceability of such pending proceedings to the State of West Bengal.

Conclusion: The liability could be enforced against the State of West Bengal and not against the petitioner.

Issue (iii): Whether the petitioner's participation in the assessment proceedings barred reliance on section 4(d) of the Oriental Gas Company Act, 1960.

Analysis: Participation in the assessment proceedings was held to be irrelevant where the statute itself transferred the burden of pending proceedings to the State. The principle applied was that there is no estoppel against a statute, and statutory protection cannot be taken away by mere participation in the earlier proceedings.

Conclusion: The petitioner was not barred from invoking section 4(d).

Final Conclusion: The statutory transfer provision applied to the pending tax proceedings, and the impugned recovery action against the petitioner could not stand.

Ratio Decidendi: In tax matters, a return filed in accordance with the assessment provisions may commence a pending proceeding, and recovery proceedings that enforce the assessed liability form part of the same proceeding for the purpose of a statutory transfer clause.

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